Published online by Cambridge University Press: 01 January 2022
I told the Shah that if the Army budget were increased we could do little if any thing for agriculture, education or public health. He said, “Very well, then; we'll have to postpone those things.”
This incident occurred in 1943, a year after the Shah had succeeded his father and was recounted by A. C. Millspough, then financial advisor to the Iranian government.
By the 1970s, however, the Iranian government was denying the relevance of the “guns versus butter” tradeoff for the country. The Shah posed the problem differently, “What is the use of having an advanced industry in a country which could be brought to its knees when faced with any small asinine event?” Asked on a subsequent occasion whether the desire for maximum national power implicit in such defense expenditure was compatible with the efforts to achieve maximum economic development, he replied, “It is not only compatible but essential.
1 Millspugh, A. C. Americans in Persia (Washington: Brookings Institution, 1946), p. 77.Google Scholar
2 Chubin, Shahram “Implications of the Military Buildup in Less Industrial States” in Ra'anan, V. ed., Arms Transfers to the Third World: The Military Buildup in Less Developed Countries (Boulder, Colorado: Westview Press, 1978), p. 268.Google Scholar
3 Cf. Fred Halliday, “Iran, the Economic Contradictions” MERIP Reports (July-August 1978), pp. 9-18; Iran: Dictatorship and Development (New York: Penguin Books, 1979)Google Scholar; “Theses on the Iranian Revolution,” Race and Class, (Summer, 1979), pp. 81-90; “The Genesis of the Iranian Revolution,” Third World Quarterly (October 1979), pp.1-16.
4 Cf. Steve Chan, “The Impact of Defence Spending on Economic Performance: A Survey of Evidence and Problems,” Orbis (Summer, 1985), pp. 403-434.
5 Sadat Deger and Ron Smith, “Military Expenditure and Growth in Less Developed Countries,” Journal of Conflict Resolution (1983), pp. 335-353.
6 Fred Halliday, Iran : Dictatorship and Development, pp. 71-71.
7 Ibid., p.73.
8 Ibid., pp. 73-74
9 Emile Benoit “Growth and Change in Developing Countries,” Economic Development and Cultural Change (1978), p. 277.
10 Leontief, W. and Duchin, F. Military Spending: Facts and Figures Worldwide Implications and Future Outlook (New York: Oxford University Press, 1983)Google Scholar; and United Nations, The Relationship Between Disarmament and Development (New York,: United Nations, 1982).Google Scholar
11 Steve Chan op. cit. (1985), pp. 403-434.
12 E. Benoit, “Growth Effects of Defence in Developing Countries,” International Development Review (Summer 1986), pp. 745-752.
13 Chan, op. cit., p. 417.
14 R. Looney and P.C. Frederiksen, “Profiles of Current Latin American Arms Producers,” International Organization (Summer 1986), pp. 745-752.
15 For an extensive review, see Chan, op. cit., and A. Cappelen, et. al., “Military Spending and Economic Growth in OECD Countries,” Journal of Peace Research (1984), pp. 361-373.
16 Rotschild, Kurt “Military Expenditures, Exports and Growth,” Kyklos (1973), vol. 26, no. 4, pp. 804-813.CrossRefGoogle Scholar
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18 E. Benoit, “Growth and Change in Developing Countries,” op. cit., p. 271. See Also N. Ball “Defence Expenditures and Economic Growth: A Comment” Armed Forces and Society (1985), pp. 298-301.
19 David Dalbclko and James McCormick “Opportunity Cost of Defence: Some Cross-National Evidence,” Journal of Peace Research (1977) pp. 145-54.
20 See C. Lyttkens and C. Vedovato, “Opportunity Costs of Defence: A Comment on Dabelko and McCormick,” Journal of Peace Research (1984), pp. 395-397.
21 David Lim, Another Look at Growth and Defence in Less Devloped Countries,” Economic Development and Cultural Change (1983), 377-384.
22 Ibid., p. 379.
23 Ibid.
24 P.C. Frederiksen and Robert Looney, “Another Look at the Defence Spending and Development Hypothesis,” Defence Analysis (1985), pp. 205-210.
25 Dan Smith and Ron Smith, “Military Expenditures, Resources and Development, ” Paper presented for the United Nations Group of Government Experts on the Relationship Between Disarmament and Development.
26 Sadat Deger and Ron Smith, “Military Expenditures and Growth in Less Developed Countries,” Journal of Conflict Resolution (1983), pp. 335-353.
27 Lance Taylor, R. Faini and P. Annez, “Defence Spending, Economic Structure and Growth: Evidence Among Countries Over Time.” Paper prepared for the United Nations Groups of Government Experts on the Relationship Between Disarmament and Development.
28 José del Pando, “Declaration of Ayacucho: Analysis and Quantification of a Possible Agreement on Limitation of Military Expenditure in Latin America.” Paper presented to the United Nations Group of Government Experts on the Relationship Between Disarmament and Development.
29 R.Faini, P. Annez and L.Taylor, “Defence Spending, Economic Structure and Growth: Evidence Among Countries and Over Time,” Economic Development and Cultural Change (1984), pp. 487-498.
30 P.C. Frederiksen and R.E. Looney, op. cit.
31 Cf. Looney, R.E. The Economic Origins of the Iranian Revolution (New York: Pergamon Press, 1983).Google Scholar
32 Thomas Walton, “Economic Development and Revolutionary Upheavals in Iran,” Cambridge Journal of Economics (September 1980), pp. 271-292.
33 Vakil, Firouz Determining Iran's Financial Surplus 1352-1371: Some Management Concepts (Tehran: Institute of International Political and Economic Studies, 1975), p. 6.Google Scholar
34 Razavi, Hussein and Vakil, Firous The Political Environment of Economic Planning in Iran, 1971-83 (Boulder, Colorado: Westview Press, 1984), p. 74.Google Scholar
35 Ibid., p. 102.
36 Ibid.
37 Wayne Joerding, “Economic Growth and Defense Spending: Granger Causality,” Journal of Development Economics (April 1986), pp. 35-40.
38 Ibid., p. 39.
39 Cf. Deger and Smith, op. cit.
40 Joerding, op. cit., p. 39.
41 Ibid., p. 39.
42 Robert Looney, “Impact of Oil Revenues on the Pre-Revolutionary Iranian Economy,” Middle Eastern Studies (January 1985), pp. 61-71.
43 A similar approach was used in R. Mallakh and M. Kadhim, “Absorptive Capacity, Surplus Funds and Regional Capital Mobility in the Middle East,” Reviste Internazionale de Scienze Economiche e Commerciali, (April 1977), pp. 308-325.
44 Cf. Koyck, L.M. Distributed Lags and Investment Analysis (Amsterdam, North Holland, 1954).Google Scholar
45 Cf. Rao, P. and Miller, R. Applied Econometrics (Belmont, CA: Wadsworth Publishing Company, 1971), pp. 88-92.Google Scholar
47 Saikal, A. The Rise and Fall of the Shah (Princeton: Princeton University Press, (1980).Google Scholar
48 R.K. Ramazani, “Who Lost America? The Case of Iran,” Middle East Journal (1982).
49 Akhavi, S. Religion and Politics in Contemporary Iran: Clergy-State Relations in the Pahlavi Period (New York: State University of New York Press, 1980).Google Scholar
50 Amir Taheri, “Public Discontents,” Kayhan International (July 13, 1978).
51 J.A. Bill, “Iran and the Crisis of 78,” Foreign Affairs, (1978).